K. Vidya Calls for Codified Cross-Border Insolvency Rules to Strengthen Creditor Confidence

In an article published by Moneycontrol.com on the proposed revamp of India’s insolvency framework, K. Vidya highlighted the urgent need for codified rules to ensure equal treatment of foreign creditors in insolvency proceedings. She noted that clearly defined and codified regulations would bring much-needed predictability to the insolvency process, enhance creditor confidence, and significantly improve India’s position as an insolvency-friendly jurisdiction.

Vidya emphasised that foreign creditors must receive timely notice of insolvency proceedings involving corporate debtors with operations spanning multiple jurisdictions. She further highlighted the importance of allowing foreign creditors to participate alongside Indian creditors in meetings of the committee of creditors, ensuring fairness and inclusivity in decision-making.

According to Vidya, codified cross-border insolvency rules would play a crucial role in value maximisation by preventing parallel proceedings across jurisdictions and enabling more efficient and coordinated resolution of complex cross-border cases. Such reforms, she said, would align India’s insolvency regime with global best practices while reinforcing investor confidence in the country’s legal and financial systems.

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